Buy Now Pay Later (BNPL) is a financing option that allows you to receive a service or acquire a product without having to pay for it right away. As described, it is a short-term quick loan lending product in which the lender pays the service provider or merchant as the transaction occurs, allowing the buyer to return the loan later with no or very little interest rates. So, what do you need to know about Buy Now Pay Later schemes?

How do you make payments through it?

You can use the BNPL payment method to make both online and offline payments. If you buy these things online, you can immediately use BNPL to pay later. Similarly, for point-of-sale transactions, you can utilize BNPL to make payments by scanning the QR code. In summary, you do not need an OTP or a PIN, but the merchant must have the BNPL payment option to complete the transaction successfully. It’s one of the most tempting aspects of buying now, pay later.

What’s the price to pay?

Because it is so easy to obtain credit, borrowers may become trapped in debt. Although the loans are tiny, several loans from different lenders may alter the borrower’s repayment capabilities, hence influencing credit culture. BNPL focuses on first-time borrowers, especially those with no credit history. Therefore, they may default, putting lenders at risk of more NPAs. 

Aside from the simplified loan eligibility, the interest-free payback period is an important selling point. If you do not refund the money within the specified time frame, you will be charged interest on the unpaid amount and high late payment fees. The last blow might be payment delays recorded to the credit agency, which would lower customers’ credit scores. 

Is it preferable to use a credit card?

While BNPL and credit cards are similar in that they both offer deferred repayment choices, there are some important differences between Buy Now Pay Later schemes. For starters, BNPL has quicker and more convenient access to financing, while credit cards demand a solid credit history. Second, using BNPL is rather simple; all you have to do when purchasing is select the option during payment.

Finally, they have different interest-free credit durations. This loan assist a credit duration of only 15-30 days, whereas credit cards offer up to 45 days. However, credit cards incur numerous fees, such as recurrent yearly fees and membership fees, whereas BNPL does not. So, if you want shorter interest-free credit loans and don’t have a credit history, BNPL is the appropriate choice for you.

How can you make the greatest use of BNPL?

While deferring payment without interest seems enticing, you may make unaffordable purchases and spend more than necessary by using the instant loan app. So, if you’re already overleveraged, avoid BNPL. Furthermore, younger borrowers must remember that they are building their credit histories. So, BNPL is beneficial for individuals who use their credit limit properly and repay on time, thus increasing their future spending limitations.

Overall, if BNPL is suitable for you, ePayLater comes in. We assist responsible borrowers who require regular access to finances and want to use them wisely without incurring unnecessary fees.